View full sizeWilliams, Dame & WhitePlans to redevelopment Lake Oswego's 107-acre Foothills district will likely need to be overhauled after a proposed streetcar stopping in the area lost support from city councilors last week. City officials and the project's lead developer Williams, Dame & White have 60 days to come up with an alternative or the redevelopment project could be put on hiatus as well.

Lake Oswego and Williams, Dame & White officials will enter a re-evaluation period this week to come up with an alternative transit connection to anchor the proposed mixed-use area for housing, retail and office space. The plan took a huge blow last week when the Lake Oswego City Council shifted against the streetcar, expected to foster economic development in the district. The project is now indefinitely on hold.

$87,300 to Roger Martin & Associates and Richard Feeney for streetcar consulting work

$25,000 to Portland Streetcar Inc for services of federal lobbyist

$87,500 to TriMet for extending selection of Locally Preferred Alternative (LPA) in 2011

$247,500 to TriMet for 2011 streetcar refinement study

$25,000 to Davis Hibbitts Midghall for Streetcar Community Attitudes Survey

$175,000 estimated spent in staff time

$2,241,300 = Subtotal

Funds due:

$1,800,000 in Metropolitan Transportation Improvement Program (MTIP) funds from TriMet for loan reimbursement

$441,300 = Total

Brant Williams, Lake Oswego director of economic and capital development, said city officials are still trying to figure out what obligations it has before officially declaring the project on hiatus. If any action is needed, the issue will likely come before the council on Jan. 24.

“Our main concern is whether the city council feels this is still a reasonable and financially feasible project to move forward,” said Williams. “Right now, the jury is still out.”

To date, Lake Oswego has spent $2.2 million in planning for a Portland streetcar line extension, including a $1.5 million loan to TriMet to lead efforts for a draft environmental impact statement. However, the city is due to receive a $1.8 million reimbursement from TriMet by this September.

In November, Lake Oswego councilors approved a framework plan for the Foothills district that heavily depends on the proposed streetcar. Officials hoped to leverage part of associated federal funds, projected north of $200 million, to help pay for redeveloping the area sandwiched between downtown Lake Oswego and the Willamette River.

“We’re still trying to understand the implications of not having such a major transit connection into Foothills,” said Matt Brown, a development manager for Williams, Dame & White. “But throwing streetcar out the window will likely decrease some of the goals the city had for the area.”

How much Lake Oswego spent to date planning for redeveloping Foothills

In June 2010, Lake Oswego agreed to finance $800,000 of a $1.3 million predevelopment agreement with Williams, Dame and White. A condition in the agreement was the development of a framework plan that lays out a strategy on how to redevelop the district.

The city also paid $129,000 to an economic consulting firm to produce a financial feasibility study. The study gauged the cost for Foothills public infrastructure updates at $134.7 million over the course of 25 years and recommended a large source of funding coming from the creation of an additional urban renewal district in the area’s north block.

The report also estimated that redevelopment could generate up to $1.6 billion of new real market value in the district over 26 years, resulting in additional property tax revenue that far exceeded the city’s investment in the public-private development. The development could also bring in 6,000 short- and long-term jobs to Foothills, the report said.

One of six conditions deemed critical to the success of the redevelopment was for streetcar planning efforts in Lake Oswego to continue. With this condition now broken, according to the contract, the city and project officials have to enter into an examination period to determine if there are any viable alternatives.

If an agreeable alternative is found, a new framework plan and financial feasibility report may be needed. If not, Williams, Dame & White can walk away from the deal. If Foothills redevelopment talks are also put on the shelf, the current framework plan could be used again if the streetcar gets back on track.

Brown added that Williams, Dame and White still feel the project is worthwhile because of Lake Oswego’s market and the site’s potential. But he also mentioned challenges.

“There’s inadequate infrastructure and issues with zoning and a 100-year floodplain,” said Brown. “The trick is going to be how are we going to balance the positives with the challenges in a way to make this financially viable for all the parties involved.”